CAMAF Member Option Guides & Info

Guide on the Determination of Medical Tax Credits (Issue 9) 23 Example 15 – Taxpayer under 65 with no disability Facts: During the 2018 year of assessment, Y (aged 34) earned a salary of R300 000 (excluding any taxable benefit). Y contributed R46 900 to ABC Medical Aid Scheme. Y's employer paid R24 000 of the R46 900. Y's employer withheld employees' tax of R47 064 from Y's remuneration of R324 000 (R300 000 + R24 000), after accounting for the MTC. All amounts were correctly reflected on Y's IRP5 certificate, and Y was not entitled to any exemption or deduction during the 2018 year of assessment. Y is claiming allowable out-of-pocket medical expenses of R19 232 as well as R2 691 incurred and paid for over-the-counter medication for a physical impairment (the qualifying expenses appear on the prescribed list). Y has kept proof of all expenses. Y is the main member on ABC Medical Aid Fund and has two dependants. Result: R Total contributions paid 46 900,00 MTC Calculation MTC: (R606 + R204) × 12 9 720,00 Tax liability Taxable income (R300 000 + R24 000) [Note 1] 324 000,00 Normal tax on R324 000 (as per tax tables) 70 422,60 Less: Primary rebate (13 635,00) 56 787,60 Less: MTC (9 720,00) Net normal tax 47 067,60 Less: AMTC (see calculation below) (1 410,75) 45 656,85 Less: Employees' tax (47 064,00) Due to Y (1 407,15) Calculation of AMTC A = R46 900 (contributions to a medical aid or fund) B = R9 720 (MTC) C = R21 923 (qualifying medical expenses of R19 232 + R2 691) D = R324 000 (represents taxable income, excluding any retirement fund lump sum benefit, retirement fund lump sum withdrawal benefit and severance benefit)

• Cover
• Preface
• Glossary
• 1. Background
• 2. Part A – Section 6A rebate (medical scheme fees tax credit)
• 2.1 Qualifying persons for whom contributions may be claimed
• 2.1.1 Meaning of a "dependant"
• 2.2 Person paying the contributions
• 2.2.1 Contributions paid by the taxpayer
• 2.2.2 Qualifying contributions
• 2.3 Medical scheme fees tax credit
• 2.4 Amount of medical scheme fees tax credit to be deducted from tax due
• 3. Part B – Section 6B rebate (additional medical expenses tax credit)
• 3.1 Background
• 3.2 Qualifying persons for whom expenses may be claimed
• 3.2.1 The meaning of "dependant"
• 3.2.2 The meaning of "spouse"
• 3.2.3 The meaning of "child" for purposes of the additional medical expenses tax credit
• 3.3 Qualifying medical expenses
• 3.3.1 Expenditure incurred inside the Republic
• 3.3.2 Expenditure incurred outside the Republic
• 3.3.3 Qualifying disability expenditure
• (a) Prescribed diagnostic criteria for a disability
• (b) Confirmation of disability (ITR-DD form)
• 3.3.4 Expenses relating to a physical impairment
• 3.4 Timing of claim for qualifying medical expenses
• 3.5 Contributions and qualifying medical expenses deemed to be paid by the taxpayer
• 3.6 Amount of additional medical expenses tax credit to be deducted from tax due
• 3.6.1 Taxpayers aged 65 years and older
• 3.6.2 Taxpayers with a disability
• 3.6.3 Taxpayers under the age of 65 without a disability
• 4. How to claim the medical scheme fees tax credit and additional medical expenses tax credit
• 4.1 Persons registered for income tax
• 4.2 Persons not registered for income tax
• 5. How to object to the disallowance of an medical scheme fees tax credit or additional medical expenses tax credit
• 6. Other information
• 6.1 Relief of customs and excise duty on a motor vehicle adapted for a physically disabled person
• Annexure A – The law
• Annexure B – The prescribed list of expenditure